Sports Betting Bill Introduced in Hawaii

Hawaii will become the birthplace of parlays and poker if a certain legislator in Hawaii has his way. Hawaii is already a paradise of pineapples and palm trees. The Hawaii Senate has received a bill from Sen. Ronald Kouchi, SB 3376, that would allow online poker and sports betting. The bill is one of the more distinctive pieces of sports betting legislation in the nation because of its many subtleties. A related bill in the House, HB 2260, mandates the establishment of a single physical gambling site. The new Bill would raise millions to support the fund for wildfire relief.

Generally speaking, sports betting legislation will specify the maximum amount of taxation a state may impose on a sports betting operator and the intended use of the tax money. Some states, like Massachusetts, provide the funds to a range of governmental initiatives. In other states, like Mississippi, the state also uses the money to upgrade its transportation network, including its roads and highways. Since the bill doesn’t specify the tax structures, we still don’t know where the money raised by Hawaii’s taxes would go. The current version of the law, however, calls for profit-sharing that would funnel millions of dollars into the state’s wildfire fund during the first 14 years of sports betting and poker.

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In the event that the law is approved, the state would receive 70% of the first year’s earnings. The state would get a 5 percent cut in the fourteenth and last year, with that amount decreasing by five percentage points annually. Following thousands of buildings being burned and over 100 people being killed by wildfires in Maui, such revenue would significantly help to stabilize the state’s finances. It resulted in costs to the state of between $4 and $6 billion, according to insurance ratings agency Moody’s.

One more thing that sets the Hawaii sports betting measure apart from most legalization efforts is its requirement for a single-operator model. To manage sports betting in the state, the state would employ a single operator. The situation is the same in New Hampshire, where there is just one sportsbook accessible—DraftKings.

It will be interesting to see with whom the state enters into an operator contract if the single-operator bill passes into law. Larger companies like FanDuel and DraftKings might avoid the Hawaii market due to the necessary revenue sharing. In the first year, operators are typically only given a thirty percent income split.

Only two states in the union have no legalized gambling at all, including lotteries, casinos, or sportsbooks. Hawaii is one of those places. Legislators have already attempted and failed to allow sports betting in Hawaii. However, the millions that this proposal’s revenue-sharing mechanism may provide to the state’s wildfire fund distinguishes it from its forerunners. The measure also contends that although Internet gambling is prohibited in Hawaii, it is widely done. The Bill said that tens of thousands of people living in Hawaii use mobile apps or online sports and poker gambling websites to engage in illicit gambling. These gaming websites are frequently run abroad, free from state regulation and taxation.

There are concerns regarding the integrity and impartiality of the games available to Hawaii citizens, but at the moment, neither federal nor state legislation give consumer safeguards for Hawaii residents who bet online. According to the measure, the state is losing out on the money that offshore sites are generating.

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